Founder of Hacked Bitcoin Exchange Mt.Gox Mark Karpeles Sentenced to Over Two Years

Founder of Hacked Bitcoin Exchange Mt.Gox Mark Karpeles Sentenced to Over Two Years

Mark Karpeles, the founder of the now-defunct bitcoin exchange Mt.Gox, was found guilty of tampering with records and given a suspended prison sentence of two years and six months. The High Court ruling comes five years after a massive security breach in 2014 at Mt.Gox that led to millions of dollars in losses for both local and foreign bitcoin investors.

The courts found Karpeles guilty of “illegally producing electronic records” in connection to Mt. Gox’s books and was given a sentence of two years six months; He was not found guilty of embezzlement and aggravated breach of trust. According to WSJ, if Karpeles remains on “good behavior” over the next four years he won’t serve prison time.

History on Mt.Gox

At the time of the hack, losses were pegged at 850,000 bitcoins—consisting of 750,000 customer bitcoins, 100,000 of the exchange’s own and worth approximately $500 million. Two hundred thousand bitcoins were later “found” by the company in an old hot wallet, bringing the number down to 650,000 still lost in total.

Karpeles eventually stood trial in 2015, but not on account of the theft. Instead, he was charged with faking trading information at Mt.Gox over “several years” and embezzling $3 million in customer funds deposited with the company.

As reported by the Japan Times, Karpeles came under scrutiny after prosecutors claimed he used the embezzled money to fund an ostentatious lifestyle, including living in a $11,000-a-month rented apartment and regularly spending on overseas trips. In addition to personal expenses, he reportedly launched a high-end 3D printing business; a cost deemed “unnecessary” for Mt.Gox’s purposes.

However, Karpeles maintains innocence to this date and denied all charges levied.